Superdry says a big clearance sale could be needed to improve its cash position as revenue fell by 23.5% in the six months to 28 October and it continued to warn of the risk of going bust this year.
Revenue was £219.8 million, as unseasonably warm weather hit sales, as previously warned. The business turned a profit of £3.3 million, but only because of the money it made from selling its IP rights in Asia.
Sales in recent weeks haven’t been much better, as it said: “The consumer retail market remains challenging and unpredictable, and sales performance has not been helped by the extreme weather events of the summer being followed by one of the warmest autumn seasons on record, which persisted through the peak Christmas trading period.”
Once a giant of British fashion, the brand famous for its faux-Japanese designs has struggled in recent years. Shares are down more than 99% since their peak in 2019, and the current share price values the business at less than £17 million. The alarmingly low market value for a firm of Superdry's size is a sign that the market doubts its ability to stay afloat.
Superdry continues to warn that there is “material uncertainty” about its future. It said: “we retain a number of mitigating actions to improve liquidity if required including, but not limited to, additional brand rights sales in non-core territories and the clearance of aged inventory at accelerated rates.”
Founder and CEO Julian Dunkerton said: “This has clearly been a difficult period for Superdry. A challenging consumer retail market, set against a backdrop of macroeconomic uncertainty and some remarkably unseasonal weather conditions have all combined to weaken the financial performance of the Group. These macro and external factors have been further exacerbated by the underperformance of our Wholesale segment.
“Despite the near-term difficulties, we have made significant operational strides over the half year as part of our ongoing turnaround. Our cost savings programme remains on track and our inventory reduction programme is progressing well. We have also taken further action to support the balance sheet with a secondary lending facility agreed with Hilco Capital in August, and the agreement for a joint venture and disposal in South Asia, demonstrating the continuing attractiveness of the brand in foreign markets.”
“Whilst, to some extent, this was expected due to the decision to exit our US operations and the sale of the brand rights in non-core territories, the segment continues to prove challenging.”
Finance boss Shaun Wills will also be stepping down. Turnaround veteran Giles David has been appointed interim CFO.
Willis said: “‘I have enjoyed my time at Superdry but now is the right time for me to move on. Superdry remains a business and brand of which I am extremely fond, and I wish Julian and the team every success in the future.”
